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TMI Blog1986 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment decided, in exercise of the powers vested in it, to revoke the original Notification, the benefit of exemption from sales tax enjoyed by the appellants came to an automatic end. The period of five years mentioned in the second Notification will have no reference to the appellants' oil mill commissioned much' earlier because the Notification had only prospective effect. We have, therefore, to affirm the view of the High Court that the appellants will be entitled to the benefit of tax exemption only for the limited period during which the concession was offered by the Government. Appeal dismissed. - 2061 of 1972 - - - Dated:- 11-11-1986 - M.P. Thakkar and S. Natarajan JJ. S.T. Desai, Senior Advocate (H.S. Parihar, M.N. Tandan and Vipin Chandra, Advocates, with him), for the appellants. G.A. Shah, Senior Advocate,(Mrs. H. Wahi and M.N. Shroff, Advocates with him), for the respondents. [Judgment per: Natarajan, J]. - In this appeal by certificate under Article 133(l)(c) of the Constitution two questions fall for consideration viz. (1) Whether the appellants had acquired a vested right of exemption from payment of sales tax under the Gujarat Sales Tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e eligibility certificate". There was an Explanation in the Notification to define what a "new industry" means and it was in the following terms:- "For the purpose of items (1) and (2) above 'new industry' means and includes an industry which has been commissioned at any time during the period from 1st April, 1970 to 31st March, 1975 (both days inclusive); but shall not include such industrial undertaking established by transferring or shifting or dismantling an existing industrial unit". 3. The appellants had set up a plant for decorticating and crushing cotton and groundnut seeds for manufacture of oil at a place called Kadi beyond 24 kilometers from Ahmedabad and commissioned the plant on May 17, 1970. On the strength of the location of the oil mill at a place more than 24 kilometers from the Municipal limits of Ahmedabad and the commissioning of the plant on May, 1970, the appellants applied to the Industries Commissioner for an "eligibility certificate" for claiming exemption from payment of sales tax as per the Notification dated November 11, 1970. The Industries Commissioner rejected the application giving certain reasons therefor. The appellants thereupon filed Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption from payment of tax only for the period anterior to 17-7-1971 and for the period thereafter they had no right to claim exemption. Being aggrieved by the non-grant of relief of tax exemption for the full period of 5 years the appellants have preferred this appeal after obtaining a certificate under Article 133(1)(c) of the Constitution. 6. Mr. Desai, learned Counsel for the appellants formulated his arguments under three heads to contend before us that the High Court ought to have granted relief to the appellants to the full extent of their claim and it should not have restricted the relief of tax exemption only for the period 17-5-1970 to 17-7-1971. The propositions put forward were in the following terms:- 1. By virtue of the Notifications dated 29-4-1970 and 11-11-1970 the appellants had acquired a vested right to a tax holiday for a period of 5 years and the Government, acting in exercise of its delegated powers did not have competence to nullify the exemption by giving retrospective effect to its Notification dated 17-7-1971. 2. The High Court was not justified in drawing a fine distinction between vested rights and existing rights and holding that the Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit of tax exemption for five years because the second Notification was prospective in operation as has been rightly pointed out by the High Court in its judgment. Since the second Notification was prospective in operation the period of 5 years mentioned therein would apply only to those new industries which were commissioned subsequent to the issuance of that Notification. As admittedly, the appellants' unit was commissioned several months before the second Notification was made, the second Notification cannot afford a basis to the appellants to raise a claim for exemption for a period of 5 years from the date of the commissioning of their plant. 9. Viewed from another perspective, it may be noticed that the State Government was under no obligation to grant exemption from sales tax. The appellants could not, therefore, have insisted on the State Government granting exemption to them from payment of sales tax. What consequently follows is that the exemption granted by the Government was only by way of concession. Once this position emerges it goes without saying that a concession can be withdrawn at any time and no time limit can be insisted upon before the concession is withd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment to withdraw or revoke the concession. We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of Promissory Estoppel. In other words, the Government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of Promissory Estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule. If the Government grants exemption to a new industry and if on the basis of the representation made by the Government an industry is established in order to avail the benefit of exemption, it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that Promissory Estoppel cannot be claimed against a statute. In the present case the appellants had not raised the plea of Promisory Estoppel before the High Court. This is understandable because the principle of Promissory Estoppel had not found crystalised acceptance by courts of law when the Special Civil Application came to be heard by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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